Public Statements

City of Central Falls Files for Chapter 9 Bankruptcy

Press Release

Central Falls Receiver Robert G. Flanders, Jr. announced today that the City of Central Falls filed for Chapter 9 bankruptcy this morning under the federal Bankruptcy Code.

In a press conference convened by Governor Lincoln D. Chafee, Judge Flanders stated that "Everything was done to avoid this day."

"Services have been cut to the bone," Judge Flanders said. "Taxes have been raised to the maximum level allowable. We negotiated with Council 94 and the police and fire unions, without success, attempting to reach voluntary concessions, and we tried in vain to persuade our retirees to accept voluntary reductions in their benefits."

"From the ashes of bankruptcy, Central Falls will rise again: a slimmer, sleeker City ready to stand on its own two legs as an independent municipality or to merge, marry, or consolidate services with one or more of its neighbors," Judge Flanders continued.

"Judge Flanders and I are here today to announce a course of action that is difficult," Governor Chafee said. "The current situation is dire, and it necessitates decisive steps to put the City back on a path to solid financial footing and future prosperity. We will be exploring all options to provide quality services at an affordable cost to all taxpayers."

"I pledge today that I will always keep the best interests of the people of Central Falls and the taxpayers of the State of Rhode Island at heart," Governor Chafee continued.

Judge Flanders announced that this morning, in order to effectuate immediate savings, a motion was filed with the Federal Court to immediately reject the Collective Bargaining Agreements with: the Police Union, which expires on June 30, 2012; the Firefighters' Union, which also expires on June 30, 2012; and the Municipal Workers' Union, which expired on June 30, 2011.

Beginning today, August 1, active employees and retirees will experience the previously proposed change in health care plans, which institute a higher deductible, changes in co-payments, and requires a 20% co-share of premiums for active employees and retirees. With respect to pensioners, the next pension payments which would be received at the end of August / early September will reflect the reductions explained at Judge Flanders' July 19 meeting at Central Falls High School and in his subsequent communications with retirees.